Doing Business in the West Bank and Gaza
President Obama announced the National Export Initiative (NEI), in 2010, with the goal of doubling exports by 2014. U.S. missions overseas are committed to supporting U.S. companies as they begin to export or increase existing exports abroad. You’ll find here a quick description of the Palestinian market as an export destination and some suggestions for getting started. The West Bank economy is small and relatively open. However, Government of Israel (GOI) restrictions on the movement and access of goods and people between the West Bank, the Gaza Strip, Jerusalem, and external markets continue to affect the private sector and limit economic growth. The de facto rule in Gaza of Hamas, a designated Foreign Terrorist Organization (FTO), combined with GOI restrictions on imports and exports, constrains private sector opportunities in Gaza. Therefore, most of the information below refers to doing business with the West Bank, and the investment climate under the Palestinian Authority (PA).
- Read the
U.S. Department of
State’s 2011 Investment
Climate Statement on the West Bank and the Gaza Strip for an overview of the foreign
investment climate. Visit the
Department of Commerce’s export.gov page
and http://buyusa.gov/westbank/index.asp to get
an overview of economic conditions and opportunities. Access the U.S.
Commercial Service Market Research Library containing more than 100,000 industry
and country-specific market reports, authored by our specialists working in
The Library Includes:
- Country Commercial Guides (read latest “Doing Business In” guides)
- Industry Overviews
- Market Updates
- Multilateral Development Bank Reports
- Best Markets
- Industry/Regional Reports
- Contact your local U.S. Export Assistance Center for advice and support on exporting to the West Bank and Gaza. Contact a Trade Specialist near you.
- Contact business support organizations in your target market, such as the Palestinian American Chamber of Commerce and the Palestinian Trade Center (PalTrade) the Palestinian Shippers’ Council, and the Palestinian Information technology Association.
- Make use of business matchmaking services available through the U.S. Foreign Commercial Service.
- Contact your local Small Business Development Center (SBDCs). Starting a business can be a challenge, but there is help for you in your area. Small Business Development Carriers (SBDCs) are partnerships primarily between the govrnment and colleges/universities administered by the Small Business Administration and aims at giving educational services for small business owners and aspiring entrepreneurs.
Investing in the West Bank
Foreign investment in the West Bank increased substantially over the last several years, and the International Monetary Fund estimates that economic growth in the West Bank reached 8 percent in 2010; growth slowed to 5.2 percent in 2011. The information and communications technology (ICT) sector is one of the fastest growing sectors in the Palestinian territories, with an average growth rate of 25-30 percent since 2000, according to statistics from the Palestinian Authority. With a growing number of high tech-focused college graduates, one of the highest Internet penetration rates in the Middle East, and competitive salaries, software development and outsourcing are considered attractive sectors for potential investors. Multinational companies working with Palestinian companies enjoy lower costs and lower attrition rates than operations in similar markets, and several U.S. and multinational firms actively outsource software development to Palestinian companies.
The United States Government, through the U.S. Agency for International Development and other assistance agencies, is working closely with the PA to improve the investment climate and trade regime through legislative reforms, improved regulations, and capacity building. The PA has focused on legal reforms as a means of improving the investment environment, and in 2011 passed a public procurement law, amendments to the income tax law, and amendments to the investment law. The investment law amendments promote Information Technology (IT) software and hardware development by basing incentives on human capital instead of fixed assets (if the company has at least five professional employees), and provides additional tiered tax incentives for projects. However, commercial projects, insurance companies, banks, money changers, and real estate (other than real estate development projects) will no longer receive tax incentives. The amendments give additional authority to the Palestinian Investment Promotion Agency (PIPA) to create incentive packages targeted to individual business needs. Also under the new law, if any step in the business registration process takes longer than one month, PIPA can intervene and issue a business license or registration on its own authority. The PIPA board, however, also has the discretion to discontinue all new incentives after April 2013 (but not retroactively), upon approval by the Council of Ministers.
The PA has hosted several large investment conferences, most recently in Bethlehem in June 2010, which attracted over 1,000 potential investors and business representatives. Over 100 projects were presented at the conference, and further information on these and other projects is available at www.pic-palestine.ps. The PA has tentative plans to host another investment conference in 2012.
Note on Gaza: Goods imported into Gaza are subject to inspection by the Israeli Crossing Points Authority (CPA) in coordination with the Palestinian Authority. The CPA maintains a list of banned items for import. Please refer to the CPA for more information on importing goods into Gaza.
Potential investors: Getting Started
If you are considering investment in the West Bank, here are some steps you may wish to consider as you get started:
- Let us know – If you are planning a visit to consider investment, let us know by sending an email to the contact addresses on this page. The Economic Section and Foreign Commercial Service can offer briefings on the Palestinian economy to interested investors.
- Visit Palestinian Authority resources on investment incentives and commercial legislation, such as the Palestine Investment Promotion Agency, Palestinian Trade Center (PalTrade), the Palestinian Shippers’ Council, and the Palestinian Information technology Association.
- Contact regional Chambers of Commerce in the West Bank and the Palestinian Ministry of National Economy
- Contact local business support organizations, such as the Palestinian American Chamber of Commerce and the Palestinian Trade Center
- Subscribe to our Consulate General Facebook page or Twitter feed @USCGJerusalem
Current Investors: Staying Connected.
If you are a current U.S. investor in the West Bank, the U.S Consulate General wants to stay in touch. Here are a few steps you can take to keep the channels of communication open:
- Let us know – If you are active in the West Bank, let us know by sending an email to the contact addresses on this page.
- Add us to your mailing lists – we are always happy to stay informed.
- Subscribe to our Consulate General Facebook page or Twitter feed @USCGJerusalem
- Set up a meeting with our economic or commercial team
For information on entry and exit procedures for Israel, the West Bank, and Gaza, visit http://www.travel.state.gov/travel/cis_pa_tw/cis/cis_1064.html#entry
_requirements. Most business visitors enter the West Bank through the Allenby Bridge/King Hussein Crossing between the West Bank and Jordan or through Ben Gurion Tel Aviv International Airport. The Government of Israel controls entry and exit through both, as well as the crossing points located between Israel and the West Bank. The Gaza Strip has one crossing point with Israel (Erez) and one crossing point with Egypt (Rafah). Entry and exit requirements change frequently. Travelers who enter the Gaza Strip through the Rafah crossing from Egypt must also exit through the Rafah crossing. The Israeli authorities do not permit such travelers to exit through the Erez crossing into Israel except in situations of extreme humanitarian need. A no-charge, three-month Israeli tourist visa may be issued upon arrival and may be renewed, and foreign nationals wishing to invest in the West Bank can apply for a longer term investment visas from the Government of Israel. Additional information is available on the Israeli Ministry of Defense’s Coordinator for Government Activities in the Territories website: http://www.cogat.idf.il/Sip_Storage/FILES/9/3079.pdf (pdf 72kb). The Government of Israel at times has declined to admit U.S. citizens wishing to visit, work, or travel to the West Bank or Gaza. Information on business visas to Israel can be found at http://www.mfa.gov.il/MFA/About+the+Ministry/Consular_affairs/
Make sure to check the current State Department travel advisory for the West Bank and Gaza Strip.
The Foreign Corrupt Practices Act (FCPA) is an important anti-corruption tool designed to discourage corrupt business practices in favor of free and fair markets. The FCPA prohibits promising, offering, giving or authorizing giving anything of value to a foreign government official where the purpose is to obtain or retain business. These prohibitions apply to U.S. persons, both individuals and companies, and companies that are listed on U.S. exchanges. The statute also requires companies publicly traded in the U.S. to keep accurate books and records and implement appropriate internal controls.
More information on the FCPA can be found here: http://www.fcpa.us/
A party to a transaction seeking to know whether a proposed course of conduct would violate the FCPA can take advantage of the opinion procedure established by the statue. Within 30 days of receiving a description of a proposed course of conduct in writing, the U.S. Attorney General's office will provide the party with a written opinion on whether the proposed conduct would violate the FCPA. Not only do opinions provide the requesting party with a rebuttable presumption that the conduct does not violate the FCPA, but DOJ publishes past opinions which can provide guidance for other companies facing similar situations.
More information on the DOJ
opinion procedure can be found here: http://www.morganlewis.com/documents/fcpa/FCPAOpinionProcedure
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